Altice offers $8.7 Billion for Oi Assets

The European cable and mobile service provider Altice offered on Monday €7 Billion ( $ 8.7 Billion) for Oi Assets.

This offer is ranked among one of the latest deals of telecommunications sector in Europe, which is next move to consolidation as cellphone operations and cable providers before regulatory changes.

Under the terms of the deal, Altice offered to buy assets of Portugal Telecom, not counting a number of complex financial instruments and the carrier’s African units.

In October 2013, Oi announced a merger with Portugal Telecom to compete against rivals, like the Spanish carrier Telefónica, in the European and Latin American markets. Altice’s offer would unravel the merger, which has not yet been completed.

Altice is operating various businesses across Europe and Caribbean.

Altice shares decreased about 2.3 percent, while Portugal Telecom rose 5.5 percent. Altice, which is based in Luxembourg, said the proposed deal for Portugal Telecom did not include these financial instruments.

CEO of Oi Zeinal Bava resigned from reasons of increasing will to sell assets to reduce its debt, valued $19 billion.

The prospective deal for Portugal Telecom follows revelations this year that the carrier held short-term debt that was defaulted by Rioforte Investments, a unit of the struggling local bank Espírito Santo.

The disclosure of the bad loans forced Portugal Telecom to reduce its stake in the proposed merger with Oi to 25 percent from 38 percent. The Portuguese carrier’s share price has fallen roughly 50 percent over the last six months.

Mr. Stakebay says:

The amount offered also includes €800 million dependent on Portugal Telecom’s future revenue and cash flow targets. Altice continues to increase interest in Portugal territory, including Portugeuese cable operators Cabovisão and Oni. This deal helps to add cellphone service to its existing operations in the country.